E7-15A

(Learning Objective 1: Measure the cost of plant assets) Murphy Self Storage purchased land, paying $150,000 cash as a down payment and signing a $180,000 note payable for the balance. Murphy also had to pay delinquent property tax of $2,500, title insurance costing $5,500, and $5,000 to level the land and remove an unwanted building. The company paid $54,000 to add 439440soil for the foundation and then constructed an office building at a cost of $750,000. It also paid $51,000 for a fence around the property, $11,000 for the company sign near the property entrance, and $2,000 for lighting of the grounds. What is the capitalized cost of each of Murphys land, land improvements, and building?

E7-22A

(Learning Objectives 3, 4: Measure DDB depreciation; analyze the effect of a sale of a plant asset)Assume that on January 2, 2012, Vincent of Vermont purchased fixtures for $8,700 cash, expecting the fixtures to remain in service for five years. Vincent has depreciated the fixtures on a double-declining-balance basis, with $1,800 estimated residual value. On September 30, 2013, Vincent sold the fixtures for $2,600 cash. Record both the depreciation expense on the fixtures for 2013 and the sale of the fixtures. Apart from your journal entry, also show how to compute the gain or loss on Vincents disposal of these fixtures.